Who pays the real estate agent's commission – the buyer or the seller?

The buyer principle: Analysis and facts

The standard procedure: The seller pays

In Switzerland, a clear rule prevails: In well over 90 percent of cases, the seller must pay the real estate agent's commission . This is due to the so-called "commission payer principle." The owner of a property commissions the real estate agent to market the property, place advertisements, and conduct viewings. They are the client. Consequently, they are also the one who owes the contractually agreed commission.

This is good news for you as a prospective buyer. In most listings you find on Homegate or ImmoScout24, the real estate agent's service is "free" for you. You don't have to pay a separate invoice or a commission directly to the agent . The agent is paid from the sale proceeds received by the seller.

The exception: The search order (search mandate)

However, there is one important situation where the tables are turned and the buyer has to pay the real estate agent's commission . This is the case with a so-called search mandate. If you can't find a suitable property in a tight market, you can hire a real estate agent to search exclusively for you. In this case, you are the one who commissioned the agent.

You sign a written brokerage agreement stipulating that you must pay the commission if the sale is successful. If you hire a professional to search for a property, you will have to pay the broker's commission yourself . This commission is often somewhat lower than for sales mandates, usually between 1.5 and 2.5 percent of the purchase price. Transparency is crucial here: a broker is generally not allowed to work for both parties and collect from both without disclosing this. So, if you commission a property search, be aware that you will ultimately have to pay the broker's commission .

Indirect costs: Does the buyer end up paying them after all?

Even if, on paper, the seller pays the bill, it's an economic reality that the buyer is indirectly involved. Sellers calculate their expenses. If a property owner knows they have to pay 3 percent of the proceeds as a real estate agent's commission , they will try to factor these costs into the sale price.

In practical terms, the buyer effectively finances the real estate agent's commission through the purchase price. However, this is a significant legal distinction. You pay a single, total price for the house. You don't receive a separate invoice from the agent and don't have to declare VAT on their services. The direct obligation to pay the agent's commission remains with the seller. This protects your equity, as the bank finances (loans) the full purchase price, whereas closing costs often have to be paid from your own funds. Therefore, the fact that you don't have to pay the agent's commission directly often makes financing easier.

Regional differences: Western Switzerland vs. German-speaking Switzerland

While in German-speaking Switzerland the principle of "the seller must pay the real estate agent's commission " is almost universally accepted, in French-speaking Switzerland (Geneva, Vaud) there are occasionally different models. In rare cases, especially with highly sought-after properties or special off-market deals, it can be agreed that the buyer will pay a commission or that the parties will share the costs. However, this must be communicated transparently in advance. If a real estate agent suddenly holds out their hand at the notary appointment and demands that you pay a commission without this having been agreed upon in writing beforehand, this is illegal. In German-speaking Switzerland, such a demand on the buyer would be completely unusual and unethical.

Double commission: Is it permissible for a real estate agent to collect twice?

commission from both the seller and the buyer ? Swiss contract law permits this only under very strict conditions or, depending on the interpretation, prohibits it in cases of conflicts of interest. A real estate agent cannot negotiate the highest price for the seller and the lowest price for the buyer. In practice, reputable agents consider it unethical to charge both parties. If you, as a buyer, purchase a property from an agent's portfolio (for which they are already mandated by the seller), you should never have to pay an additional commission .

Tax aspects for the seller

Why do sellers usually not object to having to pay real estate agent commissions ? Besides the service aspect, there's a tax reason. In Switzerland, capital gains tax is levied on property sales. This is calculated as the difference between the purchase price (at the time) and the selling price (today). The seller is allowed to deduct the so-called acquisition costs and selling expenses from the profit. This explicitly includes the real estate agent commission. By agreeing to pay the commission , the seller reduces their taxable profit. If the buyer were to pay the commission, the seller could not claim it as a tax deduction. Therefore, the system whereby the seller has to pay the real estate agent commission is often advantageous for them from a tax perspective.

Tips for buyers

• Check the listings: Pay attention to phrases like "no commission for the buyer." This is standard practice in Switzerland and confirms that you don't have to pay a real estate agent's commission .
• Reservation agreement: Read the fine print. Sometimes it contains clauses designed to shift costs onto the buyer. Sign. nothing that obliges you to pay Broker's commission to must .
• Search mandate: If you are actively looking for a real estate agent, agree on the fee in writing beforehand. Clarify what happens if they offer you a property from their own portfolio (in this case, you shouldn't have to pay a commission , as they are already paid by the seller).

Tips for sellers

When you sell, it's clear: you'll have to pay a real estate agent's commission . Negotiate the amount and the payment date. A reputable model is " No Cure, No Pay"—you only have to pay the commission once the sale has been notarized. Don't pay any upfront fees. Make sure you keep all receipts to deduct them from your capital gains tax. The fact that you have to pay the commission significantly reduces your overall tax burden.

Conclusion

The question "Who pays?" is clearly answered in Switzerland: the "besteller principle" applies. In the vast majority of cases, it is the seller who commissions the real estate agent and therefore must also pay the agent's commission .

For buyers, this means good news: you'll rarely incur direct real estate agent fees unless you explicitly request a search. However, be aware that these costs are indirectly included in the purchase price. For sellers, the commission is a cost factor, but also a tax-deductible expense. Transparency is crucial for both parties: a reputable real estate agent will always disclose who has commissioned them and who will ultimately settle the invoice and pay the agent's commission .

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Glossary

• principle of the party who commissions the service (usually the seller) bears the costs and must pay the broker's commission .
• Search mandate: A contract in which the buyer commissions the real estate agent. In this case, the buyer must contact the agent directly. pay Broker's commission .
• Dual brokerage: The activity of a broker for both buyer and seller simultaneously. The double pay Broker's commission is legally delicate and unusual .
• Capital gains tax on real estate: A tax on the profit from the sale of property. Sellers can deduct the costs they incurred for paying real estate agent commissions from the profit.
• Internal commission: Technical term for when the seller pays the commission. The buyer does not have to pay it. External commission pay Broker's commission .